Consumer confidence recovering as economic growth softens

Consumer confidence is beginning to recover after a slump over the past few months, while economists forecast a softening of U.S. economic growth in 2026.

The Conference Board looked at attitudes of consumers and CEOs as 2025 winds down and found that both groups were “extremely concerned” about the U.S. economy.

Stephanie Guichart, senior economist for global indicators with The Conference Board, said confidence has rebounded since a low point in April over worry about the impact of tariffs on the economy. However, confidence has still not recovered after reaching a high point in November 2024.

Consumers were slightly more pessimistic about future business and labor market conditions. Guichart said lower-income Americans and young adults especially noted difficulty in obtaining jobs.

For the first time, The Conference Board tracked consumer confidence by political affiliation and found continued high confidence by Republicans, improving confidence among independents and weakening confidence among Democrats.

Consumer assessments of their own family’s current financial situation recovered slightly in October, with more consumers reporting their family’s situation was good.

Consumer confidence over future buying plans

Confidence was reflected in surveys about consumers’ future buying plans. More than 11% said they plan to buy a car in the next six months – up about a half percentage point since July. Buying plans for homes climbed upward as well with about 6% saying they planned to purchase a residence in the next six months – down from a low of 5% saying the same thing in February 2024. The number of Americans who plan to buy appliances – TVs, dishwashers, refrigerators, washing machines and stoves – over the next six months also is on the increase.

Consumers pulled back on spending for services in September, but rebounded in October. The top three spending categories for October were restaurants, bars and takeout; streaming, internet and mobile services, and beauty and personal care. The largest month-to-month spending increases from September to October were for pet care; streaming, internet and mobile services, and motor vehicle services.

CEOs are slightly pessimistic

CEOs took a slightly pessimistic view of the next 12-18 months, The Conference Board found. Nearly two-thirds of CEOS said they are preparing for a mild economic slowdown with slightly increased inflation pressure. However, workforce net expansion plans recovered as more CEOs planned to hire instead of reduce their workforce.

In looking at future risk, CEOs named geopolitical instability, cyber and artificial intelligence as the three top concerns for their industry. Concerns associated with trade and tariffs eased.

U.S. economic growth is expected to soften in 2026, with a projected gross domestic product growth of 1.5%, compared with 1.8% in 2025 and 2.4% in 2024, said Eric Lundh, Conference Board senior economist.

Factors driving that projection include a softening labor market, rising inflation, falling interest rates and a moderating growth environment.

The Conference Board forecasts a soft fourth-quarter 2025 with GDP growth of 1.4% year over year, an unemployment rate of 4.4% and a core inflation rate of 3.3%.

Lundh predicted “slower, more anemic growth but no recession.

“We certainly think growth will suffer as a result of some issues, especially regarding trade, but we do not predict a recession.”

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